Support for energy efficiency

Energy efficiency is the most cost effective way to reduce energy consumption and greenhouse gas emissions. Indeed, energy efficiency pays for itself in the long run. Every sector of the economy is ripe for energy efficiency improvements, whether it be buildings, industry, infrastructure, or transportation.

Government can play an important role through its procurement policies, by mandating that the buildings it commissions and rents, the vehicles it adds to its fleet, or the equipment it purchases meet rising energy efficiency standards.

Some of the policies supporting energy efficiency that EESI examines are:

Buildings

Air Conditioning Standards / Seasonal Energy Efficiency Ratio (SEER)

Heating and cooling represents nearly half a home’s total energy bill (or about $1,000 a year, on average, according to the EPA). Air conditioners alone use about 5 percent of all the electricity produced in the United States, and so are responsible for the release of about 100 million tons of carbon dioxide per year (two tons per home equipped with an air conditioner, on average). The efficiency of central air conditioning units is governed by U.S. law and regulated by the U.S. Department of Energy (DOE). Every air conditioning unit is assigned an efficiency rating known as its “seasonal energy efficiency ratio” (SEER). The SEER is defined as the total cooling output (in British thermal units or Btu) provided by the unit during its normal annual usage period divided by its total energy input (in watt-hours) during the same period.

Substantial energy savings can be obtained from more efficient air conditioning systems. For instance, upgrading from a SEER 9 to a SEER 13 rated united can reduce power consumption by 30 percent (representing savings of up to $300, depending on usage and electricity costs). According to the Department of Energy, the SEER 13 standard will save 4.2 quadrillion Btu between 2006 and 2030, yielding net savings of approximately $1 billion to consumers by 2020. The SEER 13 standard will also limit air pollution and reduce fossil fuel consumption, by up to 33 million metric tons of carbon.

While equipment prices have modestly risen under the standards, Lawrence Berkeley National Laboratory research indicates that the benefit energy savings are more than three times the cost on a net-present value basis. As old appliances are replaced by new ones the positive impact of the energy efficiency standards will continue to grow. From 1990 to 2030, it is estimated that consumers and businesses will save approximately $186 billion (1997 dollars) just from the existing standards that have been adopted.

The SEER 13 standard was adopted by the Clinton administration in 2001, after a seven-year public review process. New air conditioning equipment had to comply with the SEER 13 standard starting in January 2006. The standard was previously set at SEER 10, established by Congress in 1987, and the change from SEER 10 to SEER 13 represented a 30 percent improvement in energy efficiency. The Bush administration rolled back the standard, but it was reinstated by court ruling in 2004.

In 2011, the U.S. Department of Energy (DOE) decided to raise the energy conservation standard for residential HVAC systems in certain regions of the country. Such an approach recognizes that cooler regions do not benefit as much from high SEER air conditioning units. Starting in January 2015, split system central air conditioners installed in the Southeast and Southwest must be rated at least SEER 14. In the rest of the country, the minimum standard will remain at SEER 13.

Appliance & Equipment Standards / Energy Star

Uniform national standards for energy efficiency on an array of products were first put into place in 1987 when President Regan signed the National Appliance Energy Conservation Act (NAECA). In 1988, efficiency standards for fluorescent lamp ballasts were added by Congress, and in 1992, President Bush signed the Energy Policy Act, which added new efficiency standards for certain types of lamps, electric motors and commercial heating and cooling equipment. The first Bush Administration continued to add efficiency standards laying the groundwork for the Clinton Administration to set new standards for refrigerators, air conditioners, ballasts, clothes washers, water heaters, and heat pumps.

The ENERGY STAR® technology labeling and recognition program was formed in 1992 by the Department of Energy and the U.S. Environmental Protection Agency (EPA), under the authority of the Clean Air Act. It is a voluntary, market-based approach to reduce U.S. air pollution through the use of energy efficient appliances, lighting, electronics, and other products. ENERGY STAR certification can apply to products (such as appliances and electronics), but also to homes, commercial facilities, and industrial plants.

ENERGY STAR currently encompasses about 18,000 partners (manufacturers, trade associations, retailers, contractors, home builders…), and covers products in more than 65 different categories, representing over 4.5 billion items sold over the past 20 years. More than 20,000 facilities and 1.4 million new homes are ENERGY STAR certified.

According to EPA, families and businesses purchasing and using ENERGY STAR labeled products have saved more than $239 billion on utility bills and prevented more than 1.9 billion metric tons of greenhouse gas emissions over the past two decades.

Building Energy Codes

We spend nearly 90 percent of our lives inside buildings, according to the U.S. Environmental Protection Agency. It is no surprise, therefore, that building codes address many of a society’s most important concerns, including public health and safety, and environmental protection. In large part, building codes establish a building’s quality, safety and energy performance for years to come, because initial design and construction decisions determine operational and maintenance costs for the life of the building. Building equipment and other components may be replaceable and upgradable, but many aspects of building performance are "designed in" at the beginning, and are too expensive and difficult to change. Foundations and other parts of the building envelope are typically in place for 50 years or more. Model codes, a set of minimum requirements for building design, construction and operation to protect public health, safety and the natural resources that sustain us, help us "build it right" at the beginning when it matters most. New energy codes, for instance, can make a major contribution toward solving our energy problems. The average American building wastes far too much energy because it was not designed and constructed with energy efficiency as a priority. This is unacceptable at a time when best practices for sustainable design are widely known and taught, when energy efficient appliances and equipment are a growing percentage of suppliers’ and retailers’ inventories, and given the multiple benefits of reducing our energy consumption.

Buildings consume vast amounts of energy. The daily operation of homes and buildings––for lighting, heating and cooling, powering appliances and equipment––uses about 40 percent of total U.S. energy resources and 70 percent of total electricity. Buildings also account for nearly 40 percent of U.S. greenhouse gas emissions. All this resource consumption (and waste and pollution) unnecessarily costs home owners, building owners and the U.S. economy billions of dollars each year and is a major contributor to climate change. Model energy codes provide states with minimum standards for efficiency that are achievable using widely available and affordable building materials, technologies and best practices. The requirements in the model codes account for differences in climate and geography across the country. States should adopt the latest model codes, and ensure that local jurisdictions enforce all building codes.

Updating building codes on a regular basis (a minimum of three years is the norm) also offers enhanced protection against natural disasters and manmade hazards and makes communities more resilient, sustainable and livable for generations to come. This lowers the price of climate change mitigation and adaptation for building owners and communities. See our section on building codes and climate resiliency for more information.

As a benefit to home owners, homes built to updated energy codes will save energy and cost less to operate than less efficient homes. The U.S. Department of Energy estimates that energy efficiency improvements in the 2009 and 2012 International Energy Conservation Code (IECC) pay for themselves in one to two years, leaving the average home buyer with a windfall of hundreds of dollars in energy savings every additional year he/she owns the home. Commercial building owners value the economic benefits of reduced energy and water use and are beginning to see increased demand for better performing buildings.

Updated codes that produce a more valuable building should benefit builders in addition to owners. Unfortunately, that is not typically the case. Mortgage underwriting standards do not enable appraisers and lenders to properly value enhanced efficiency and other high performance features. Outdated housing policies need to be revised to enable the fledgling "green" building market to take off. In addition, model codes are effective only if they are enacted into law and enforced by state and local governments. Read our paper on the Value and Impact of Building Codes.

On-Bill Financing / Rural Energy Savings Program (RESP)

The Rural Energy Savings Program is an innovative idea developed by electric cooperatives in South Carolina to address the special challenges and opportunities facing rural communities to save energy, cut household utility bills, and reduce greenhouse gas emissions. The program also supports stable, high-skilled jobs and keeps more dollars in the local economy. Through the program, residential energy efficiency improvements are financed with low-cost loans that are repaid through co-op members’ electric bills (a process known as “on-bill financing”).

The 2014 Farm Bill (Agricultural Act of 2014) included language to create the Rural Energy Savings Program (RESP) within the U.S. Department of Agriculture's Rural Utility Service. The agreement provides funding for RESP at $75 million per year over five years. RESP will provide zero percent loans to rural electric cooperatives for the purpose of relending the funds to co-op members to make energy efficiency improvements (such as air sealing, duct repair, HVAC upgrades, insulation improvements...). RESP will support "on-bill financing" programs, in which energy efficiency loans are repaid through the beneficiary’s electric bills.

EESI has worked closely with South Carolina's electric co-ops for several years on their successful on-bill financing pilot, "Help My House," which reduced participants' average electricity use by 34 percent while also providing a net financial benefit. Indeed, in most cases, the energy savings that resulted from the pilot's energy efficiency improvements more than covered the loan repayments, making it a win-win for everyone involved: utilities don't need to invest as much in new power plants, households save money while making their homes more comfortable, and less energy use means fewer carbon emissions.

Transportation

Approximately every six years, Congress authorizes a funding and policy package that defines federal support to states for transportation infrastructure planning and projects. The content of this bill has far-reaching effects on states and regions and their economic competitiveness, transportation options, land use patterns, environmental quality, and public health.

In 1991, Congress passed the Intermodal Surface Transportation Efficiency Act that signaled a major shift in federal policy from a “highway bill” to a comprehensive “transportation bill.” The programs and policy structure of that bill have largely been retained in successive reauthorizations – first the Transportation Equity Act for the 21st Century (TEA-21) in 1998 and then the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA – LU) in 2004, which expired in September 2009. Transportation funding was then extended nine times by Congress through continuing resolutions of the previous bill; an agreement on a new bill wasn't reached until June 2012. The new bill, the Moving Ahead for Progress in the 21st Century Act (MAP-21), was signed into law by President Obama on July 6, 2012. It authorizes public transportation and highway program expenditures at over $105 billion through September 2014.

The Highway Trust Fund (HTF) continues to be the revenue source for 80 percent of federal transit investment (e.g. $8.6B of $10.7B in FY 2014), and virtually all federal highway spending. The HTF collects over 85 percent of its revenue from the federal fuels taxes on gasoline (18.4 cents per gallon) and diesel (24.4 cents per gallon). These taxes, viewed as a “user fee” for the transportation system, have not been raised in nearly 20 years, which has led to the declining purchasing power of the HTF. The remaining revenue is received from a sales tax on new heavy trucks and trailers, as well as taxes on heavy truck tires and use. MAP-21 extends collection of these taxes through September 2016. Since 2008, these revenue sources have been insufficient, and general revenues have been used as a supplement. The MAP-21 bill continued this practice, with $18.8 billion in general funds in FY13 and FY14 combined. With this funding, the HTF is projected to remain solvent until near the end of the authorization period.

Fuel Economy Standards / Corporate Average Fuel Economy (CAFE)

Making vehicles more efficient is one of the surest ways to reduce gasoline consumption and greenhouse gas emissions. It also saves drivers money at the pump. Indeed, the 2017-2025 standards are expected to save 163-170 billion gallons of fuel and generate over $450 billion in net economic benefits.

In December 2007, after 20 years of stagnation, Congress changed U.S. vehicular fuel-economy standards. These standards were accelerated and extended further by President Obama in 2009, requiring gradual annual increases between 2012 and 2016, so that the fleet-wide average will be 35.5 mpg by 2016 (39 mpg for cars, 30 mpg for light trucks). Due to federal standards set in 2010, the national average for model year 2013 vehicles must meet 30.5 miles per gallon (MPG), and 34.1 MPG for model year 2016 vehicles. Fuel efficiency standards for model years 2017-2025 were finalized in 2012, developed in consultation with the auto industry. New cars and light trucks in 2025 will need to meet a fleet average of 54.5 MPG.

Idle Reduction

Trucks and buses travel approximately 230 billion miles every year in the United States, working hard to move goods and people. Most trucks and buses in use today are diesel-powered. More advanced engines, cleaner fuels, and stricter federal standards are gradually making diesel vehicles cleaner and cleaner.

Even the newest diesel-engines, however, emit significant levels of pollution, and older diesel vehicles tend to last a long time before they are replaced. Thus, maximizing the efficiency with which trucks and buses—and all vehicles for that matter—are operated can make a big difference in how much fuel they use and how much pollution they create.

Idle reduction is an important strategy for improving overall fuel efficiency and avoiding unnecessary human exposure to pollutants. According to the U.S. Environmental Protection Agency (EPA), excessive and unnecessary truck and bus idling consumes an estimated 1.2 billion gallons of diesel fuel every year—accounting for approximately three percent of all diesel fuel consumed for road transportation.

Idling also generates more pollutants per gallon as diesel engines—tuned for optimum operation at traveling speeds—do not combust fuel as efficiently when idling. In addition, idling tends to occur at places where vehicles and people are gathered, concentrating pollutants and increasing human exposure. In particular, diesel exhaust contains particulate matter too small to be seen with the naked eye which lodges in lung tissue when inhaled. Particulate pollution is believed to cause or exacerbate numerous health problems including cancer, asthma, reduced lung function, and premature death.

The Utah Clean Cities Program, National Energy Foundation, and Environmental and Energy Study Institute (EESI), have developed an Idle Reduction and Clean School Bus Curriculum to help school officials and bus drivers reduce unnecessary school bus idling.

Travel Demand Management Policy / Complete Streets

Travel demand management policies, which exist to some extent at the federal level, but are more commonly implemented at the state and local levels, can foster more efficient use of the existing transportation network. Studies of these techniques have shown a reduction of vehicle miles traveled of 10 percent or more, and often an increase in the fuel efficiency of trips taken due to reduced congestion, all of which substantially reduces energy use and carbon emissions. Travel demand management strategies include:

Congestion pricing

Pay-as-you drive insurance

Employee benefits for non-automobile travel

Ridesharing

Guaranteed Ride Home programs

Park-and-Ride lots

Complete Streets policies are one form of travel demand management that can both improve safety and reduce fuel use and emissions. Complete Streets are streets that have been made safe for all users—including bicyclists, pedestrians and users of public transportation. Research shows that well designed sidewalks, bike lanes, intersections, and other street features to accommodate all modes of travel can significantly reduce injuries, deaths, and automobile crashes. Additionally, the provision of safe, convenient, and efficient transportation infrastructure enhances the quality of communities, supports property values, and mitigates the effects of traffic congestion that accompany growth. Complete Streets have become more important as Americans embrace more transportation choices and more people demand homes and employment centers in walkable areas.

More than 500 jurisdictions at the local, regional, and state levels are now using Complete Streets policies to plan, construct and operate streets that safely accommodate all users – including transit riders, bicyclists, pedestrians of all ages and abilities, and drivers. These policies are helping to build stronger local economies, attract businesses, and support healthier and safer communities.